May 18, 2009

California

California's top political columnist, Dan Walters of the Sacramento Bee, writes:

Memo to Californians from everyone else in the world: You folks out there in sunshine land caused this historic global recession, and it's time for you to mend your ways.

Farfetched? Not really.

A very good case can be made that California's developers, mortgage lenders and house-hungry but income- deficient residents, with state and local officials as enablers, created an unsustainable housing bubble. And when that bubble burst, leaving holders of mortgage bundles – many of them overseas banks – with little more than toilet paper, it created a banking crisis that spread to virtually every other segment of the global economy.

No, it was not confined to California. It happened in a few other high-growth states such as Florida, Arizona and Nevada. But nine of the 10 top issuers of subprime and no-documentation mortgages were headquartered in California, and the state has been ground zero for the collapse of those mortgages as adjustable interest rates "reset" upward, having recorded more than a half-million foreclosures and other symbols of distress.

My published articles are archived at iSteve.com -- Steve Sailer

15 comments:

Anonymous said...

I read Walters all the time, but I have to tell him, "Sorry, a guy by the name of Steve Sailer beat you to the punch on this one, big time."

PRCalDude said...

But do any blacks and hispanics read Dan Walters, since we now have hard data showing they composed the bulk of the bad loans? If so, will they be motivated to introspection by his column, or will they just write him off as another p-e guero/cracker member of the Oppressive Anglo Male class? I'm pretty sure I know the answer...

John Seiler said...

What Walters said has a great deal of truth in it. Schwarzenegger and others also promoted unwise loans to minorities.

But California had little, if any, control over the Greenspan-Bernanke Fed's easy-money policy, nor over Bush's wild spending on wars and domestic programs.

Go State, Beat Tech said...

"Californians". Sigh. The increasingly laughable Euro-Americans really thrill to smallfry Shelbyville/Springfield ingroup/outgroup categorization, but when it comes to anything larger, or more meaningful, or of survival value...you get the picture.

In my Idaho newspaper the other day, they gave a description of a man who attempted a rape along the greenbelt. The public was to help be on the lookout! They needed to apprehend this dangerous perp!

He was "tall".

beowulf said...

Its time to reboot California. For starters, its too damn big. Split it up into four smaller states (obviously I'm talking about population) and let each of the new states write their own constitution.

Conveniently enough, the federal court system has already divvied up the state. Here's a map showing California's four federal judicial districts.
http://www.fedstats.gov/mapstats/fjd/06fjd.html

Anonymous said...

He sure mentions "Californians" a whole lot...but never mentions "Hispanics."

Maybe he doesn't realize that a very large number of the Californians who caused the housing bubble 'just happen to be' Hispanics?

Pseudothyrum said...

re: beowulf

I agree that California is way too big to be decently managed/governed and that it should be split up in to at least 3-4 different states.

Anonymous said...

Its time to reboot California. For starters, its too damn big. Split it up into four smaller states (obviously I'm talking about population) and let each of the new states write their own constitution.

Is that even Constitutionally permissible?

Anyway, why the hell would anyone want to give California 6 more senators? Why oh good heavens why?

Anonymous said...

"He was "tall"."

Those tall people, always creating trouble.

Anonymous said...

"Is that even Constitutionally permissible?"

Who cares? It is a Living Document.

"Anyway, why the hell would anyone want to give California 6 more senators? Why oh good heavens why?"

Correct, that won't solve a thing anyway. Only secession from the FedGov will. More fun too. See you at the party! And believe me, it is going to be a barn burner, literally. You can count on that.

John Seiler said...

One of the things to keep in mind is Schwarzenegger's assault on the state economy the last 3 years. Here's the chronology:

2003. Elected on promises to cut taxes and tame the budget. He did cut the car tax (which was illegal anyway and would have been thrown out in court) that Gray Davis unilaterally had imposed. Under Davis, state unemployment was 1 percentage point *above* the national average.

Arnold campaigned as a "gatekeeper" who would stop the left-Democratic Legislature from passing too much spending, and from increasing taxes.

March 2003. In a special election Arnold called, voters passed $15 billion in bonds to tide the state over while he controlled spending. This was unwise. He should have worked to pass a new Gann Amendment, which until it was eviscerated by voters in 1990, had limited spending increases to increases in population plus inflation.

2003-05. Arnold actually was a pretty good "gatekeeper" (on fiscal matters, anyway). He also reformed workers' compensation, whose arcane and expensive rules had driven away businesses.

Nov. 2004. A bad sign was that Arnold supported Prop. 71, which wasted $6 billion for fetal stem cell research (also, an immoral harvesting of unborn children). He said it would advance state industries -- that is, it was industrial policy that never has worked except to waste money.

Late 2005. After 2 years in office, state unemployment had improved, and at this time was 1 percentage point *below* the national average. Good job, especially for a large, diverse, high-tax state.

Nov. 2005. Arnold's "year of reform" ended in disaster, as his slate of 4 ballot measures failed. One measure would have limited state spending.

After the defeat, Arnold panics. He announces that he needs to listen more to "the people," a refrain since then. But for him, "the people" more is like the mystical German "Das Folk."

Jan. 2006. Arnold announces a new era of cooperation with Democrats. One of his wife's cronies, Susan Kennedy (no relation to the Shriver-Kennedys) is appointed chief of staff. Susan also was a top aide to the recalled Gray Davis. Effectively, Arnold signaled he was nullifying the recall of Davis.

Arnold and the Democrats go on a massive spending binge. Even though he still comes out against tax increases, there's no way the spending binge can lead to anything except perpetually unbalanced budgets, debt, and tax increases.

During this time, he's also promoting sub-prime loans to minorities that can't afford them.

May 2006. Arnold signs into law AB32, which gives government vast new powers to kill jobs and businesses supposedly to fight "greenhouse gases."

Nov. 2006. Arnold is re-elected by attacking Demo opponent Phil Angelides' insistence that the deficits have to be paid for with higher taxes. Arnold also attacks Angelides' call for socialized medicine.

Jan. 2007. Arnold calls for socialized medicine in California. However, even the Democratic Legislature is more sober, recognizing that the economy is beginning to teeter, the deficits are rising, and there just ain't no money.

Fall 2008. With the state budget perpetually out of whack, Arnold hints at tax increases.

Feb. 2009. Arnold signs into law $16 billion in tax increases. Another $16 billion are put on the May 19 ballot. The taxes go into effect on April Fools' Day. Even before the new hikes, California had the highest income and sales taxes in the country. The top state income tax rate, 11.55%, is higher than the 11 percent rate in Russia -- for the whole country.

March 2009. The California unemployment rate rises to 11.2%. That's 2.7 percentage points *above* the 8.5% national rate.

Put another way, in just 3 years, Arnold, just by himself, had increased state unemployment by 3.7 percentage points. (It went from being 1 point better than the national rate to 2.7 points worse.)

That means Arnold, personally, is responsible for 44% of California's unemployment. (3.7 / 8.5 * 100).

In March 2009, unemployment was 2,080,000. So Arnold, personally, is responsible for 915,200 jobs being lost.

Any account of California's foreclosure crisis should take into account Arnold's culpability. How many of those 915,200 people who lost jobs because of Arnold couldn't make their home payments?

Certainly, the Greenspan/Bernanke inflation and the foolish loans to immigrants who couldn't afford them are bigger factors in the foreclosure crisis. But Arnold's policies the past 3 years also are big factors -- as big has his steroid-pumped muscles once were, and as his ego still is.

ben tillman said...

"Californians". Sigh. The increasingly laughable Euro-Americans really thrill to smallfry Shelbyville/Springfield ingroup/outgroup categorization, but when it comes to anything larger, or more meaningful, or of survival value...you get the picture. True. However, I must point out that most people named "Walters" are not of European ancestry

eh said...

Apropos or not: a listing of the most popular surnames in California.

I wonder how it would correlate with a list of surnames appearing most frequently among (subprime) mortgage defaulters in California.

beowulf said...

Yes its legal to subdivide a state.
Article IV of the United States Constitution provides for the creation of new states of the Union, requiring that any such creation be approved by the legislature of the affected state(s), as well as the United States Congress.http://en.wikipedia.org/wiki/List_of_U.S._state_secession_proposals

PrestoPundit said...

I think I have a plagiarism lawsuit against Walters here somewhere.

I think I wrote these exact same sentences 6 months ago ..